Effective oversight is not about monitoring every implementing partner in the same way. It is about identifying where the greatest risks lie, gathering the right evidence and directing monitoring resources where they can make the greatest difference.

Funders working with multiple implementing partners face a persistent challenge: how can they maintain strong financial accountability, compliance and programme performance without imposing unnecessary monitoring requirements on every organisation they support?

Some implementing partners have established financial controls, reliable reporting systems and a strong track record of delivery. Others operate in complex environments, manage substantial funds or face challenges with internal controls, reporting accuracy and programme implementation. Treating these partners identically can result in excessive oversight in some areas and insufficient scrutiny in others.

This is where risk-based monitoring of implementing partners becomes essential.

Risk-based monitoring is an approach that uses the nature, likelihood and potential impact of identified risks to determine the type, frequency and depth of monitoring required. Instead of applying the same monitoring schedule to every partner, funders tailor their oversight to the risks that matter most.

The objective is not simply to conduct more reviews, request more documents or increase field visits. It is to obtain reliable evidence that funds are being used appropriately, activities are being implemented as intended, compliance obligations are being met and programme results can be substantiated.

So, how should funders design a monitoring approach that balances accountability, efficiency and programme performance?

1. How Should Partner Risks Determine the Type and Depth of Monitoring Required?

A risk-based monitoring framework begins with understanding that not all implementing partners present the same risks.

A partner managing a large grant across several remote locations may require different monitoring arrangements from a smaller organisation delivering a limited number of activities in an accessible location. Similarly, a partner with strong financial controls but weak field reporting may require more attention to implementation evidence than to routine financial documentation.

Funders should therefore use partner risk assessments to determine what needs to be monitored, what evidence is required and how deeply identified concerns should be investigated.

The following examples illustrate how monitoring activities can be aligned with specific risks.

Identified risk or concern	Appropriate monitoring response
Weak financial controls	Review expenditure records, supporting documents, reconciliations and the effectiveness of financial controls.
Unreliable performance reporting	Reconcile reported results with source records and independently verify material discrepancies.
Recurring implementation delays	Examine delivery bottlenecks, milestone dependencies, implementation plans and corrective actions.
Limited visibility of field activities	Conduct targeted field visits, remote verification or beneficiary checks where appropriate.
Unresolved compliance findings	Track corrective actions and verify whether identified weaknesses have been addressed.
Weak partner coordination	Assess role clarity, decision-making arrangements, communication and escalation procedures.

The important distinction is that higher risk does not automatically mean more monitoring in every area.

For example, if a partner has reliable financial controls but repeatedly reports activities that cannot be verified, requesting additional financial statements may not address the main concern. The priority should be to establish whether reported activities took place and whether the expected results were achieved.

Likewise, where financial irregularities are the primary concern, increasing general programme visits may provide limited assurance unless the visits specifically examine the relevant financial exposure.

Funders should also consider the effectiveness of existing controls, the reliability of available information and the consequences of a risk materialising. This helps ensure that monitoring activities address genuine evidence gaps rather than duplicate checks that already provide sufficient assurance.

2. When Should Funders Increase or Reduce Monitoring Intensity?

Risk-based monitoring should not be treated as a one-time exercise completed when a grant is approved. Partner risks can change throughout the implementation period, and monitoring arrangements should respond accordingly.

A partner that initially demonstrates strong performance may encounter staff turnover, rapid programme expansion, changes in operating conditions or weaknesses in financial management. Conversely, a partner that previously required enhanced scrutiny may improve its controls and demonstrate consistent compliance.

Funders therefore need clear triggers for adjusting monitoring intensity.

When should monitoring be increased?

Additional monitoring may be warranted when evidence indicates that existing oversight arrangements are no longer sufficient.

Common triggers include:

• Repeated delays in financial or narrative reporting.
• Significant discrepancies between expenditure and implementation progress.
• Unexplained variances in reported outputs or results.
• Recurring audit findings or unresolved compliance weaknesses.
• Material changes in partner leadership, staffing or operating arrangements.
• Evidence that corrective actions have not been implemented effectively.
• Concerns about safeguarding, fraud, misuse of funds or other serious misconduct.

These triggers should not all produce the same response. A minor administrative delay may justify follow-up and closer tracking, while suspected fraud or a serious safeguarding incident may require immediate escalation under the funder’s established procedures.

The response should reflect the urgency, potential consequences and credibility of the available evidence.

When can monitoring be reduced?

Enhanced monitoring should be reduced only when sufficient evidence demonstrates that the underlying risks have been addressed.

For example, a partner that previously experienced recurring reporting discrepancies may return to routine monitoring after its reporting controls have been strengthened, source records have been reconciled and subsequent reporting has proved reliable.

The decision should consider whether corrective actions are operating effectively, not merely whether the partner has submitted an action plan or confirmed that a weakness has been addressed.

Funders should document the reasons for changing monitoring intensity, the evidence supporting the decision and any residual risks that still require attention.

This creates a responsive monitoring system in which oversight can increase when concerns emerge and decrease when reliable evidence supports greater confidence.

3. When Is Remote Monitoring Sufficient, and When Is Field Verification Necessary?

Remote monitoring is an important part of implementing partner oversight. Financial reports, expenditure schedules, implementation updates, procurement records, beneficiary registers and supporting documentation can provide substantial information without requiring frequent site visits.

However, documentation does not always establish that activities occurred as reported, that goods reached their intended recipients or that programme outputs meet the required standards.

Consider a programme distributing agricultural inputs to smallholder farmers. Procurement records may demonstrate that the inputs were purchased, while distribution registers may indicate that they were issued to beneficiaries. Neither record, on its own, necessarily establishes that the intended beneficiaries received the correct quantities.

Targeted beneficiary checks or field verification can provide additional evidence where the available documentation leaves material questions unanswered.

When is remote monitoring appropriate?

Remote monitoring may be sufficient for particular activities when:

• The risk level is relatively low and established controls are operating effectively.
• Reports are timely, consistent and supported by reliable source records.
• Previous monitoring has provided adequate assurance about implementation.
• The relevant information can be independently corroborated through reliable records or digital evidence.
• The cost or difficulty of field access is disproportionate to the additional assurance a visit would provide.

Remote monitoring should still be purposeful. Receiving reports and filing documents is not, by itself, evidence that meaningful oversight has taken place.

When should funders consider field verification?

Field verification becomes particularly valuable when reported results cannot be adequately substantiated remotely, implementation quality requires direct observation or significant discrepancies remain unresolved.

Examples include:

• Verifying whether reported infrastructure has been completed and is operational.
• Checking whether programme supplies reached intended beneficiaries.
• Observing whether services are being delivered in accordance with agreed standards.
• Examining implementation challenges that cannot be understood from routine reports.
• Investigating discrepancies between reported activities and available evidence.

Field verification should be targeted towards the risks and questions that require additional assurance. Depending on the programme, this may involve site visits, beneficiary interviews, physical inspections, document checks or sample-based verification.

Funders must also distinguish between routine field engagement and independent verification. Programme staff can visit implementation sites to support delivery and identify problems. Where greater independence is required, a qualified third-party monitoring provider may be commissioned to verify selected activities, expenditure or reported results.

Third-party monitoring can be conducted remotely or on-site, depending on the assignment’s objectives, the reliability of available evidence and the level of assurance required.

The key question is not whether a funder should monitor remotely or in the field. It is whether the selected method provides sufficient, reliable evidence to address the identified risk.

4. How Should Funders Allocate Limited Monitoring Resources Across Implementing Partners?

Monitoring budgets, staff time and access to implementation locations are rarely unlimited. Funders must therefore decide which partners, activities and locations require additional attention and which can be adequately covered through routine monitoring arrangements.

A risk-based approach supports this decision by directing additional resources towards material risks, significant evidence gaps and areas where monitoring is most likely to influence management decisions.

However, resource allocation should not be based on risk ratings alone. Funders should also consider the amount of funding involved, the significance of expected results, the potential consequences of failure, the reliability of existing assurance and the cost of obtaining additional evidence.

For example, two partners may receive similar risk ratings but require different monitoring arrangements because one manages a substantially larger grant or delivers services in locations where implementation failures could have more serious consequences.

Funders can improve the efficiency of monitoring by applying several practical measures.

Use existing assurance evidence. Where reliable audits, expenditure reviews, compliance assessments or monitoring reports already address a particular risk, funders should consider whether additional checks are necessary.

Apply risk-based sampling. Rather than examining every transaction, location or reported activity, funders can select samples based on materiality, risk exposure, unusual patterns and the need to verify reported results. Sampling should be designed carefully and should not be treated as a guarantee that unexamined items are free from risk.

Coordinate monitoring activities. Financial reviews, programme monitoring and compliance assessments can be coordinated where their objectives overlap, reducing duplicated requests and unnecessary disruption to implementing partners.

Prioritise decision-relevant evidence. Monitoring activities should be selected because they answer a specific question, resolve an important uncertainty or support a management decision.

Document resource allocation decisions. Funders should record why additional monitoring is being directed towards particular partners, what risks the activities address and what evidence will be used to determine whether further action is necessary.

Importantly, efficiency should not come at the expense of essential safeguards. Minimum contractual, financial, regulatory and safeguarding requirements must still be met, regardless of a partner’s overall risk rating.

The aim is to eliminate unnecessary duplication and low-value monitoring, not to remove the controls required to protect funds, beneficiaries and programme outcomes.

5. What Should a Risk-Based Monitoring Plan Include?

A risk assessment becomes useful only when it informs actual monitoring decisions. Funders should translate identified risks into a documented plan that specifies the activities to be undertaken, the evidence to be collected, the people responsible and the circumstances that would trigger further action.

A practical risk-based monitoring plan should include the following components.

Monitoring plan component	What it should establish
Risk profile and priorities	The main risks, their significance and the evidence gaps requiring attention.
Monitoring objectives	The specific questions that monitoring activities are intended to answer.
Monitoring methods	The reporting reviews, expenditure checks, interviews, field visits or verification procedures required.
Frequency and coverage	How often monitoring will occur and which partners, locations, activities or expenditure areas will be examined.
Evidence requirements	The documents, records, observations or independent confirmations needed to support conclusions.
Roles and responsibilities	Who conducts monitoring, reviews findings, approves decisions and follows up on corrective actions.
Escalation procedures	The circumstances requiring enhanced scrutiny, management intervention or referral under applicable procedures.
Corrective action tracking	How findings are assigned, addressed, verified and closed.
Review and adjustment	When risk ratings and monitoring requirements will be reassessed.

A useful plan should also identify the intended use of monitoring findings. If the evidence collected will not inform a decision, resolve a material uncertainty or support accountability, the funder should reconsider whether the activity is necessary.

For example, if the objective is to establish whether reported programme outputs have been achieved, the plan should specify how the outputs will be verified, what constitutes acceptable evidence and how discrepancies will be investigated.

If the objective is to address weak financial controls, the plan should identify the relevant expenditure categories, supporting documentation, control procedures and corrective actions to be examined.

This level of clarity helps monitoring teams work consistently and makes it easier for funders to explain why different partners are subject to different oversight arrangements.

6. How Can Funders Ensure That Monitoring Findings Lead to Action?

A monitoring framework is only as effective as the decisions that follow from its findings.

Funders may identify control weaknesses, reporting discrepancies or implementation delays, but these findings provide limited value if they are not assigned to responsible individuals, addressed within reasonable timelines and followed up appropriately.

Effective risk-based monitoring therefore requires a clear process for turning evidence into action.

First, monitoring findings should be documented with sufficient evidence to support the conclusions reached. Funders should distinguish between confirmed issues, emerging concerns and matters that require further investigation.

Second, findings should be prioritised according to their significance and urgency. A minor documentation gap may require a routine corrective action, whereas a material financial irregularity or serious safeguarding concern may require immediate escalation through established procedures.

Third, corrective actions should have clearly assigned responsibilities and realistic deadlines. Where a partner is responsible for resolving a weakness, the funder should specify what improvement is expected and what evidence will demonstrate that the issue has been addressed.

Finally, closure should depend on verification rather than assurances alone. Funders should determine whether the corrective action has resolved the original problem and whether the relevant controls are operating effectively.

This process also provides information for future risk assessments. Repeated failure to implement corrective actions may justify increased monitoring, while sustained improvement can support a reduction in enhanced oversight.

By linking findings, corrective actions and subsequent risk assessments, funders create a continuous monitoring cycle rather than a series of disconnected reviews.

7. What Common Mistakes Should Funders Avoid?

Even well-intentioned monitoring frameworks can become inefficient when they are designed around administrative routines rather than risk and evidence.

Several common mistakes deserve particular attention.

Applying identical monitoring requirements to every partner. Uniform minimum standards may be necessary, but additional oversight should reflect the risks, evidence gaps and assurance requirements associated with each partner.

Treating risk ratings as permanent. Risk profiles should be reviewed as implementation conditions, partner capacity and available evidence change.

Increasing monitoring without defining the purpose. More reports, site visits and document requests do not automatically provide stronger assurance. Each activity should address a clear monitoring objective.

Relying exclusively on self-reported information. Partner reports are essential, but material results and unresolved concerns may require corroboration through source records, independent checks or field verification.

Closing findings without verifying corrective action. A submitted action plan does not demonstrate that the underlying weakness has been resolved.

Reducing oversight solely to save costs. Resource constraints should encourage better prioritisation, coordination and sampling, not the removal of essential accountability measures.

Avoiding these mistakes helps funders establish a monitoring approach that is proportionate, evidence-based and responsive to changing circumstances.

Conclusion: Effective Monitoring Starts With the Right Questions

Designing risk-based monitoring for implementing partners requires funders to move beyond fixed reporting schedules and uniform oversight requirements. The focus should be on understanding where risks lie, determining what evidence is needed and selecting monitoring activities that provide meaningful assurance.

A well-designed approach aligns monitoring depth with risk exposure, adjusts oversight when circumstances change, combines remote review with field verification where necessary and allocates limited resources according to the significance of the risks involved.

It also ensures that findings lead to corrective action, that improvements are verified and that monitoring requirements evolve as the evidence changes.

Ultimately, effective risk-based monitoring comes down to three questions:

1. What risk are we addressing?
2. What evidence do we need?
3. What decision will that evidence inform?

When funders can answer these questions for every significant monitoring activity, they are better positioned to strengthen accountability, protect programme resources and support the achievement of intended results without imposing unnecessary burdens on implementing partners.

For funders managing complex portfolios, the goal is not to monitor everything equally. It is to achieve the right level of assurance, for the right reasons, at the right time.

Frequently Asked Questions (FAQs)

1. What should the terms of reference for risk-based implementing partner monitoring include?

The terms of reference should define the monitoring objectives, implementing partner coverage, identified risks, methodology, frequency, geographic scope and expected deliverables. They should also specify evidence requirements, reporting arrangements, escalation procedures, independence requirements where applicable, and how findings will inform programme management decisions.

2. When should funders commission third-party monitoring of implementing partners?

Third-party monitoring is particularly useful when funders need independent assurance, have limited access to implementation locations, or cannot adequately verify reported progress through existing monitoring arrangements. The assignment should address clearly defined risks and evidence gaps, with its methodology and scope determined by the level of assurance required.

3. How can funders reduce implementing partner monitoring costs without weakening oversight?

Funders can reduce monitoring costs by coordinating reviews, using reliable existing assurance evidence, applying risk-based sampling and prioritising activities that address material risks. Savings should come from eliminating duplication and low-value activities, not from removing essential financial, compliance or safeguarding controls.

4. How often should implementing partner risk assessments be reviewed?

Risk assessments should be reviewed periodically according to the programme’s risk profile and monitoring arrangements. They should also be reassessed when significant events occur, such as recurring reporting discrepancies, changes in partner leadership, material implementation delays or new compliance concerns. Serious incidents may require immediate reassessment.

5. What is the difference between risk-based monitoring and routine monitoring?

Routine monitoring generally follows established reporting schedules and standard oversight procedures. Risk-based monitoring uses an assessment of partner-specific risks, existing controls and evidence gaps to determine where additional scrutiny is necessary. The two approaches can work together: routine requirements establish a baseline, while risk-based measures provide targeted additional assurance.

WRITTEN BY EP MARTINS ADVISORY